Retirement unknowns causing anxiety

[SumDay]

I have moments of angst, which I imagine could intensify as I actually get closer to leaving w*rk. However, the data from this Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey gives me greater hearburn:

However, three in 10 American adults have not started saving for retirement. And it is not just young adults that lack adequate savings; 68% of those ages 45 to 54 and half of those ages 55 to 64 have $100,000 or less in retirement savings.

PLANSPONSOR.com - Retirement Unknowns Causing Anxiety

To those referred to in the last sentence, what we have saved is a fortune. And I do, at times, wonder if it's enough. I guess it's all relative.

 

[timeasterday]

This week we had a 401k info meeting at work led by the company that manages our plan along with many others. I was surprised just how clueless many people are about saving for retirement. Some didn't even know where to log on and check their account. Others put all their money in the safest stable funds. And many, many loans being taken out on their 401k accounts. Unfortunately nobody at work ever talks about investing. Now I see why - they probably wouldn't know what to discuss!

But if you are comfortable with your savings and appear to be on target then I wouldn't get heartburn over news like that. Those people will be heavily reliant on Social Security and will be just barely getting by in retirement.

 

[gerrym51]

I have moments of angst, which I imagine could intensify as I actually get closer to leaving w*rk. However, the data from this Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey gives me greater hearburn:




PLANSPONSOR.com - Retirement Unknowns Causing Anxiety

To those referred to in the last sentence, what we have saved is a fortune. And I do, at times, wonder if it's enough. I guess it's all relative.

as long as it's not you why worry about it.

 

[SumDay]

as long as it's not you why worry about it.

I inherited some high-risk promissory mortgage notes from my parents. I'm just hoping they're all paid for before these folks reach retirement age. They're barely making payments now. Part of my retirement is based on timely receipt of those payments.

And besides, I'm of the belief that a rising tide raises all ships. I think the rift between the "haves" and the "have-nots" is getting bigger all the time, but this is probably a hot button I shouldn't push on this congenial forum.

 

[coolowl]

Every situation is so different (income needs vs. expenses) that it is difficult to listen to the opinions of others. What might be plenty for one isn't enough for someone else.

Nevertheless, the experiences from the contributors in this forum are that everyone seems to be doing just fine. I assume that is reassuring to someone considering retirement. People are making it ...and in some cases making it really well.

My advice is create a realistic budget of your future expenses. And then you'll know what you'll need. I created a spreadsheet that got more and more elaborate and detailed as time went by. The more precise it got, the more useful it became. I figured in my potential incomes from social security and different "what-if's" from investments.

Doing all that helped convince me that I could retire, pay my bills, and have money to spare to play around with. So I retired last summer and it's going just as expected.

Good luck to you.

 

[SumDay]

Back before computers, I had time to track literally every dime we spent in a very detailed notebook full of ledger sheets.

Then we had kids.... Now they're grown & gone.... And I once again am making the time to do this. I've used Quicken for well over a decade, but not to the level I am now. I am once again even breaking down the Costco bill into groceries, clothing, household, etc. I used to just pay the bill, but I was losing a lot of detail by doing it that way.

I've got to keep insurance on DH (pre-existing condition) for ~5 more years, so I've got lots of time to continue tracking. I think we'll be fine - my worry-wart nature just needs some reassurance.

 

[Midpack]

"Grant me the serenity to accept the things I cannot change,
The courage to change the things I can,
And wisdom to know the difference."

After almost 35 years proactively counseling hundreds of employees about planning for their future financial security, managing their 401k's intelligently, etc. - and being largely ignored or even criticized for it, despite all sorts of different approaches...

Didn't stop me from doing what I thought was the right thing, I did what I could. I wish my former co-workers well, but I fear for most of them financially.

 

[MichaelB]

I have moments of angst, which I imagine could intensify as I actually get closer to leaving w*rk. However, the data from this Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey gives me greater hearburn:




PLANSPONSOR.com - Retirement Unknowns Causing Anxiety

To those referred to in the last sentence, what we have saved is a fortune. And I do, at times, wonder if it's enough. I guess it's all relative.

SumDay, how does this affect you and your retirement efforts and objectives?

 

[Brett_Cameron]

......

My advice is create a realistic budget of your future expenses. And then you'll know what you'll need. I created a spreadsheet that got more and more elaborate and detailed as time went by. The more precise it got, the more useful it became. I figured in my potential incomes from social security and different "what-if's" from investments.

Doing all that helped convince me that I could retire, pay my bills, and have money to spare to play around with. So I retired last summer and it's going just as expected.

Good luck to you.

This is what I did. Understand that there is no certainty in anything you assume. Make your plan and adjust as you will have to when life happens!
It is a wild ride, but no wilder than maintaining employment for decades.

 

[SumDay]

SumDay, how does this affect you and your retirement efforts and objectives?

MichaelB, see Post #4 above

 

[Tyro]

Nevertheless, the experiences from the contributors in this forum are that everyone seems to be doing just fine.

Which forum is that? I have expressed many times to being borderline and not sleeping as well as I'd like to, and I've read of many others (e.g. many of the OMY folks) in similar situations. If everyone were "doing just fine" there wouldn't be much need for a place like this to help folks like me/us.

While I expect there is some fear-mongering in the article cited in the O.P., I know [-]many[/-]... too many hard-working families who have enough trouble making ends meet, and still haven't enough left over to think about saving for retirement. Usually, their kids come first, and they'll deny themselves a future before denying their kids one.

The contributors here are in a select minority. I often wonder how many folks find this place, lurk a bit, then realize how ill-prepared they are, and never/seldom post out of embarrassment, fear, or reality check.

Tyro

 

[Stanley]

I inherited some high-risk promissory mortgage notes from my parents. I'm just hoping they're all paid for before these folks reach retirement age. They're barely making payments now. Part of my retirement is based on timely receipt of those payments.

I see your point.

Is it possible to sell these notes to somebody else (probably at a discount) who is willing to take the risk and use the funds to develop another source of income for retirement?

 

[SumDay]

Is it possible to sell these notes to somebody else (probably at a discount) who is willing to take the risk and use the funds to develop another source of income for retirement?

I've sold some of the actual homes after foreclosing (abandonment, cash for keys, etc.). The rest: I'm stuck with. Believe me, I've tried everything. Their credit scores are so bad, no one would touch them for even a penney on the dollar. I was so desperate that one day I even called Dave Ramsey's show to get his input. After listening to everything I'd done his response was "darlin', you're screwed. Make lemons into lemonade."

Actually, the ones I have left are the cream of the crop and I've got a pretty good system down. I still have to hear a story or two as to why they'll be a few days/weeks late each month, but they are paying. It's just my nature to worry about those less fortunate, and believe me, they are less fortunate.

FYI, I really didn't post this article asking for advice, I was just giving my personal thoughts on the state of affairs re: retirement savings.

 

[Tyro]

I still have to hear a story or two as to why they'll be a few days/weeks late each month, but they are paying. It's just my nature to worry about those less fortunate, and believe me, they are less fortunate.

Maybe that's your lemonade. The right book or script with all the stories just might sell...

Tyro

 

[grasshopper]

My number one rule don't rely on inheritances for retirement, make it your fun money.

 

[W2R]

My number one rule don't rely on inheritances for retirement, make it your fun money.

+1000

 

[Ronnieboy]

This week we had a 401k info meeting at work led by the company that manages our plan along with many others. I was surprised just how clueless many people are about saving for retirement. Some didn't even know where to log on and check their account. Others put all their money in the safest stable funds. And many, many loans being taken out on their 401k accounts. Unfortunately nobody at work ever talks about investing. Now I see why - they probably wouldn't know what to discuss!

I have heard it is due to litigation fears too!

I invested in fund ABC like the company said and I lost $XXXXX. Class action suit to follow....

 

[gerrym51]

I inherited some high-risk promissory mortgage notes from my parents. I'm just hoping they're all paid for before these folks reach retirement age. They're barely making payments now. Part of my retirement is based on timely receipt of those payments.

And besides, I'm of the belief that a rising tide raises all ships. I think the rift between the "haves" and the "have-nots" is getting bigger all the time, but this is probably a hot button I shouldn't push on this congenial forum.

i don't understand. do they owe you the money or someone else. if they owe someone else how are you liable

 

[enjoyinglife102]

Whenever I see data like this, it just raises my concerns about how much social security a lot of us will see. One of the proposals which is particularly irksome to me is to set a minimum payout that everyone will receive regardless of what they paid in. SS is so incredibly skewed already to those who have contributed the least.

 

[Bikerdude]

as long as it's not you why worry about it.

Because if it gets to be a big problem, affecting a lot of people, someone will step forward to solve it.

 

[SumDay]

gerrym51

i don't understand. do they owe you the money or someone else. if they owe someone else how are you liable

They owe me the money.

Bikerdude:

Because if it gets to be a big problem, affecting a lot of people, someone will step forward to solve it.

+1 bazillion

This is what really concerns me. What enjoyinglife 102 said:

Whenever I see data like this, it just raises my concerns about how much social security a lot of us will see.

This is far bigger than just my merry little band of mortgagors. This is really what is giving me heartburn.

Enough worrying for today. I can't fix this problem, as Midpack so aptly quoted.

 

[Milton]

the data from this Franklin Templeton Retirement Income Strategies and Expectations (RISE) survey

I don't know the specifics on that survey, but consider the source. Mutual fund companies have a vested interest in whipping up anxiety re retirement ("if I don't start investing aggressively, I might be reduced to eating cat food!"). That's why they also promote the myth that every retiree will need passive income equal to at least 70% of pre-retirement income.

 

[bUU]

I've seen similar reports before, from a variety of sources, and I have not seen any reports stating that "practically everyone ages 55 to 65 have enough in retirement savings to live on for 30 years", so I'm inclined to believe the report. Furthermore, a number of co-workers have come to me to chat about retirement, since they heard I've been working hard to understand what needs to be understood, and those conversations also lead me to believe that that report is pretty close to on-target.

I think I shared on this forum (and if not, it was on another forum) last week that I learned that my holdings plus the holdings of a close friend in my company represent almost 25% of the whole for my company's 401k plan. We're just two employees out of thirty. And our company is not a young group. As I contemplate ER in 5-10 years, some co-workers my age are just starting to think seriously about retirement.

From the advice co-workers have asked me for over the last six months, I have gotten an impression of just how much (or little) some of them have saved for retirement. Unless the stock market triples in value, few of my co-workers could possibly save up the amount that I figured I'll need to have saved in order to be able to afford to retire, even if they stopped paying the mortgage, stopped eating, turned off the electric, from now until FRA.

But catching up like that doesn't even seem to be the general intention: I have several times explained the difference between having the 401k, as crappy as ours is (no match, high ERs), versus not having a 401k, and instead being able to deduct IRA contributions - essentially highlighting the difference between putting away ~$17k/$23k per year tax-advantaged versus putting away only ~$5k/$6k per year tax-advantaged per year. So far only one co-worker gave any indication that that represented any significant difference to them. From these comments and from the understanding that my own holdings represent such a large percentage of the whole plan, I wouldn't be surprised to learn that on average co-workers are contributing no more than $100 per biweekly paycheck toward retirement.

Perhaps these folks are atypical, but I rather doubt it.

 

[Gumby]

The metaphorical grasshoppers will always be with us. And, yes, it may impact our own lives by driving means testing of social security, reducing pension security, tanking the equities and real estate markets and things like that. But rather than worry, I try to plan around those eventualities. Thus, our own plan, which is within a few years of being implemented:

1.) Does not assume any reduction in spending from our current level, except for not saving or paying the mortgage anymore. There is plenty of fat in that budget, so we could cut back if we really needed to;

2.) Does not rely on receiving one penny from Social Security;

3.) Does not rely on any inheritance;

4.) Does not rely on extracting any of the equity from our house;

5.) Can be paid for by pension income alone or by a 4% draw on our stash.

I realize that it is probably overkill, that we could retire sooner and that we will probably die with a large chunk of unspent assets, but it helps me avoid worrying about these things. As I learned long ago, plan for the worst and hope for the best. Once you've done everything in your own control, relax and enjoy the ride.

 

[REWahoo]

Thus, our own plan, which is within a few years of being implemented:

1.) Does not assume any reduction in spending from our current level, except for not saving or paying the mortgage anymore. There is plenty of fat in that budget, so we could cut back if we really needed to;

2.) Does not rely on receiving one penny from Social Security;

3.) Does not rely on any inheritance;

4.) Does not rely on extracting any of the equity from our house;

5.) Can be paid for by pension income alone or by a 4% draw on our stash.

I realize that it is probably overkill...

Belt, suspenders, duct tape, super glue, Velcro and two pair of pants.

What could possibly go wrong!